A Property you hold besides your residential space

Definition of an investment property

Any property that tends not to be held by its owner, generally bought particularly to generate earnings by capital gains or rental revenue as opposed to non-investment asset. People seldom utilise the words second home and investment property interchangeably to describe real property which not make the primary residence. However, there are found a few dissimilar differences amid these kinds of assets.

The investment property makes the kind of property that is:

1-It is not the primary residence of its owner

2- It can be utilised or bought to generate revenue, earnings from gratitude, or to benefit from several tax benefits

Essentially, in case you buy real estate which you may utilise to generate revenue, in place of using it in the form the personal residence for your members of the family or you, this property will be deemed to be an investment property. The financial institutions or banks will be financing for investment properties owned by you after you comply with their rules and regulations. It may contain mortgage and twenty-five per cent down payment and more.

You will come across a lot of various kinds of investment property as:

1-Property bought to flip wherein the purchaser buys property with the intention to resell it only to get profit

2- Commercial property

3- Property bought only to get rental revenue

The loans approved for investment property normally bear high rates of interest and need a huge down payment in comparison to assets held by its owners by way of second homes. It can be said that property development funding in South Africa is gaining momentum from its slow start.

Definition of second home

A second home means a residence which an owner intends to hold besides a primary residence nearly for a portion of the year. Usually, a second home can be utilised by way of a vacation home, although it may as well be an asset that an owner happens to visit regularly.